A federal judge in Allentown on Friday sent the long-running legal fight over the $50 million casino license fee that investors paid in 2007 for the defunct Foxwoods casino project back to bankruptcy court.
The move came after the U.S. Court of Appeals for the Third Circuit in January reversed a decision last year by U.S. District Court Judge Joseph F. Leeson Jr., finding that a bankruptcy court had properly applied standards for fraudulent transfer claims.
The appeals judges said that bankruptcy court had jurisdiction over the fraudulent transfer claims, but gave Leeson the choice of keeping the case for himself or sending it back to bankruptcy court, where the original 2014 case was heard by Judge Magdeline D. Coleman.
The Foxwoods investors, formally known as Philadelphia Entertainment & Development Partners LP, were among Pennsylvania’s original license winners, but after years of delays and no progress on the South Philadelphia casino, the Pennsylvania Gaming Control Board revoked the license in 2010.
After losing a bid to recoup the $50 million fee in Commonwealth Court, the group, which included the late Comcast-Spectacor chairman Ed Snider, and family charitable trusts for developer Ron Rubin and the daughter of the late Lewis Katz, turned to bankruptcy court.
The 16.5-acre lot on South Columbus Boulevard between Tasker and Reed Streets where the casino was to be built was sold in 2014 to Bart Blatstein for $13 million. Blatstein sold some of the land for a large townhouse development. His plan to put a super-sized Wawa convenience store with gas pumps has angered neighbors.